Hype about Uniqlo: Should buyers put money into the inventory? | EUROtoday

Tadashi Yanai’s plans are formidable. With Uniqlo, the richest man in Japan needs to create the most important trend firm on the planet. He intentionally doesn’t concentrate on “fast fashion”, which is short-lived and is rapidly thrown away, however quite on “lifewear”: the objects of clothes ought to final a lifetime, no less than that’s what the corporate guarantees.

Today, Uniqlo operates greater than 3,500 shops around the globe. Instead of copying fashionable cuts from designer catwalks like quick trend manufacturers, the Japanese firm focuses on easy, purposeful and long-lasting design in muted colours.

Uniqlo has lengthy since arrived in Europe. Here the group is opening so-called flagship shops in historic buildings in main cities. Long queues, generally with a whole bunch of consumers, shaped in Munich, Frankfurt and Cologne on the primary weekends after the opening.

The hype can be mirrored within the share value of Fast Retailing, the corporate behind the Japanese model. With the rise to 377.80 euros, the paper reached an all-time excessive in Frankfurt in mid-February. The market capitalization is over 21 trillion yen, which corresponds to round 115 billion euros. There has been a long-term upward pattern since October; the inventory has gained 36 p.c throughout this era. The cause for this was the optimistic enterprise figures that the corporate introduced in October. Because Uniqlo’s enterprise is doing higher than analysts anticipated.

Fast Retailing considerably elevated gross sales and earnings within the first quarter of the 2025/26 monetary 12 months (August 31). From September to November, group gross sales elevated by 14.8 p.c year-on-year to 1,027.7 billion yen (5.61 billion euros), and working revenue rose by 33.9 p.c to 210.9 billion yen. The firm thus exceeded the expectations revealed in October. The working margin improved to twenty.5 p.c, after 17.6 p.c in the identical interval final 12 months.

Of 20 analysts who comply with the corporate, in response to the monetary information company Bloomberg, 11 advocate shopping for, 8 advocate holding and one analyst recommends promoting. They see the goal value on an annual foundation as a mean of 62,314 yen, round 339 euros.

“Uniqlo’s overseas boom is exceeding expectations,” mentioned Sho Kawano, head of funding analysis at Goldman Sachs Japan. “The recipe for success consisting of quality and functionality, brand building and great scope for growth points to sustainable increases in results.”

In its dwelling market of Japan, the group was not too long ago beneath commentary due to the Chinese authorities’s advice to keep away from touring to Japan. According to UBS Securities, a 50 p.c drop in duty-free gross sales to Chinese prospects might cut back working revenue by about 1 p.c.

According to Hiraku Sugawara from IwaiCosmo Securities, the rising demand from worldwide vacationers ought to offset this impact: “Sales to visitors from other countries are increasing sufficiently to compensate for the losses.”

Yanai took over his father’s clothes enterprise within the Eighties to revolutionize Japanese trend with high-quality mass-produced items. In 1984, he opened the primary Uniqlo retailer in Hiroshima and from the beginning managed design, manufacturing and gross sales to cut back prices. All with the objective of making the most important trend firm on the planet. But no less than on the subject of share costs, the top of the highway might have been reached.